Osteocalcin (OC), a vitamin K dependent calcium binding protein, is the only known bone-specific protein. It is a significant component of the extracellular matrix and circulating levels are widely used as a clinical marker of bone turnover. Osteocalcin synthesis and gene expression are modulated by numerous physiologic factors that are known to regulate osteoblast function, including steroid hormones. We have developed a normal diploid rat osteoblast culture system that produces a bone-like extracellular matrix to study regulation of OC within the complexity of changes that occur during extracellular matrix formation and mineralization. We have documented the differential expression and selective modification of osteocalcin by steroid hormones during the developmental sequence of osteoblast differentiation. We have cloned the rat OC gene, identified its vitamin D responsive element and a primary transcriptional regulatory element, both of which contain AP-1 sites that bind the oncogene encoded fos-jun proteins. It is known for other genes that transcription is regulated by interactions between independent elements as well as by multiple classes of transcription factors within a regulatory element. The synergistic and antagonistic effects of steroids on OC gene expression suggests that such regulatory mechanisms are operative. We propose to use normal diploid osteoblasts and a panel of chimeric gene constructs with deletions or targeted mutations in promoter regulatory elements to (1) define the levels and mechanisms at which regulation of osteocalcin gene transcription is mediated, both in vitro and in vivo (transgenic mice) in relation to tissue specificity bone development; (2) define physiologic mediators (vitamin D, glucocorticoid, estrogen) of OC gene transcription by characterizing the positive and negative promoter regulatory sequences, their cognate sequence-specific transcription factors, and the functional proximity of regulatory elements from chromatin structure studies; and (3) carry out functional studies by altering (by inhibition or premature upregulation) of OC expression. A systematic analysis of the OC promoter, focusing on positive and negative regulatory elements and steroid responsive elements that regulate OC gene transcription, we will make a contribution towards understanding its role in bone metabolism and, in a broad biological context, elucidate mechanisms associated with the regulation of genes by physiologic modulators.